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12. Bull, Bear & Beyond – SenSen Networks: executive interview
6 Plays1 year ago
SenSen Networks’ CEO, Subhash Challa, and CFO, Christian Stevens, discuss how the business has transformed over the past 12 months and the factors that have enabled SenSen to deliver strong business momentum on a significantly lower cost base. Subhash explains the specific drivers behind SenSen’s momentum in Canada and why he believes the US market may not be far behind. Christian outlines how SenSen is adding more predictability and scalability to its model, a key factor that has enabled the business to deliver two consecutive positive cash flow quarters.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Original interview published on 21/10/2024 and reposted as a podcast
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Transcript
Introduction to Sensen Networks and Key Personnel
00:00:06
Speaker
Today I'm joined by Subhash Chava and Christian Stephens from Sensen Networks. Sensen are a vision and center analytics
Sensen Networks' Technological Edge
00:00:15
Speaker
business. The company's platform fuses together data from networks of cameras, sensors and other digital sources to deliver real-time insights. So those insights are used across a range of applications, including road safety, parking, theft detection, and so on.
Financial Overview and Strategic Challenges
00:00:34
Speaker
um Subhash, many thanks for joining me today. um You've just published your Q1 statement, and that comes off the back of and really quite a transformative 2024.
00:00:47
Speaker
Can you give us a summary of the progress you've made over the past year or so? Yeah, so as as as we came out of COVID and all the whole wars and everything was starting, you know many things were impacting companies, including us. It was pretty chaotic. And in particular for Sensen, we had even bigger problems with a patent infringement lawsuit going on Sensen.
00:01:14
Speaker
um We won a very big contract with NHVR. which we had to deliver with the cash balance dwindling. So we had to do a small raise. So it was an extraordinary range of events, increasing the risk of the company.
Strategic Recovery and Growth Path
00:01:29
Speaker
Under those circumstances, we had to come back and have a major strategic review of where we are and what we need to do. And our executives got together and we focused on first removing those paid and infringement cases after the fundraise was closed.
00:01:45
Speaker
um And we could successfully deliver on that. That was a very important thing, dragging the company, the executive bandwidth, the money, and all the other stuff that comes with it. um Second important thing was to bring in new chairman onto the board to give bit more balance. um And also new you know new new investors and new stockbrokers looking at the stock and other ways to boost our attention to our stock as we are improving the
00:02:15
Speaker
ah the company. and um And Mark brings in that kind of experience from Appen, a great company in its heyday. and you know And we're very glad to have him on board. That was the second big thing that we had to achieve um when when we delivered on that.
Sustainable Growth and Financial Performance
00:02:33
Speaker
um Then it was all about how do we ah to you know carefully look at the staff and ah you know the spread of talent within the company and cut the costs in a way that doesn't impact the growth.
00:02:49
Speaker
At the same time, deliver the savings that the company needs to have. We're effectively you know focused on a strategy to get our costs down to be within our annual recurrent revenue ah cash inflows that come in from the customers.
00:03:05
Speaker
um It took a few iterations. So if you look at various announcements we made, there were lot of one-off payouts, like, you know, because staff have been there for a while, redundancy payments and other one-off costs.
00:03:17
Speaker
We handled all of that. We landed smoothly and we delivered a cost structure that's sustainable with recurrent revenue at this point in time. Okay. So those are the major things that we had to do.
00:03:30
Speaker
And then deliver the cashflow positive quarters. And it sort it was not enough to just give one quarter. We got to do second quarter and we're going to set it up to do the third quarter and so on. So sustainable cashflow positive can't be a guidance unless we actually deliver it. So we we have delivered two of them and we believe we are well-placed to keep you know hitting the mark you know as the new quarters arrive.
00:03:54
Speaker
Thanks. But you've also delivered an inflection in in revenues and in business momentum at the same time as as as reducing costs. And that's really quite rare. can you Can you talk through the dynamics on how you're managing to achieve that?
Revenue Growth and Customer Retention
00:04:12
Speaker
Yeah, I think if you if you look at it, the top line revenue growth comes with years of and investment doing POCs and successfully completing it and all that. So if we go back to Canada and the momentum that's coming in Canada with Montreal um you know and Calgary and then Toronto, and prior to that, we had Vancouver. and So it was not an overnight success. It's been a consistent effort that we that has got us to this point.
00:04:40
Speaker
So the top line revenue growth that's coming in is a result of those that investment that we have done. What's pleasing to us and to the to to our investors, it should be, is that we're not only adding new cities, very big cities like Montreal, um but we had Calgary, who was our customer in 2016, in an open tender win.
00:05:01
Speaker
That was a remarkable win given. and We had very little references in that space. We just had to win purely by innovation. um Now it is after good six, seven years of being a customer, they do an open tender, go to the world and still choose us. right And now we can be there with the firm, potentially we can be we'll be there with them for next nine years as per the contract. and um So when you look at it there, once you get a customer there for a lifetime,
00:05:28
Speaker
and And that is not just there. It's it's everywhere in the world. we haven't really we we We rarely lose any customers, but they're all adding. and So that's the reason for the top line growth, because we are getting the ARR from the old wins.
00:05:44
Speaker
Customers who are there with us are just rejoining or extending their contracts or when we are winning open tenders or even things that are like extensions within the contracts. So that's what's delivering the growth.
00:05:56
Speaker
um And ah being a live awareness platform, we have a lot of use cases that are outside just you know smart cities.
Platform Versatility and Competitive Advantage
00:06:05
Speaker
So there have been revenue coming from other areas, including our fuel retail, seaports, airports, you know and other applications that that um that fit the fit the live awareness platform.
00:06:21
Speaker
So your um ability to apply your platform across a range of use cases has always created a key differentiator of the platform and a capability of your technology.
00:06:33
Speaker
um Can you discuss how that is enabling you to expand your deployments within your existing customer base? Yeah, it it actually shows up in two different dimensions.
00:06:45
Speaker
If you look at Smart Cities itself, um our live awareness platform can be on a moving car, like a console car, or it could be on a pole or pole insertable cameras that we had invented.
00:06:59
Speaker
um um or Or it could be you know a handheld dev device with smartphone acting like a live awareness device. right So the platform is able to go and establish itself and get gather data from different kind of platforms that allows us to provide different or solve different use cases for the same smart city customers. So the platform plays itself into providing you know different um different value propositions and benefits to the same customer base. right
00:07:33
Speaker
But on the other extreme, we could we could take the same platform and solve a curb management problem in an airport. okay or a container lashing and lashing activity and safety around that and traffic flow within a seaport.
00:07:51
Speaker
And Singapore's Port Singapore Authority, the largest port in the whole world, um is ah our customer because you know they looked all around the world and our live awareness platform to deliver that capability has been you know chosen. right So if you look at it, the breadth of applications in different verticals and within the same customer base, multiple use cases.
00:08:17
Speaker
So these are multiple revenue streams that we have been building slowly. and um And that is a serious compet competitor advantage since it has in the
North American Market Focus
00:08:26
Speaker
market. so it's So looking specifically at ah North of America, yeah um this has been a strategic priority for the business for quite a while. And you've recently announced a number of wins in Canada. Your momentum looks particularly strong there. um Can you discuss your progress in the region and also your priorities priorities from Europe?
00:08:46
Speaker
So the momentum you're seeing in Canada is many years in the making. And um we are very glad that all the work is converting to the results that we wanted. So having Montreal, but prior to Montreal was Vancouver.
00:09:00
Speaker
Okay. And Vancouver, now Montreal, then you know Calgary repeating itself and Toronto growing. ah We won a small deal in Toronto about a year ago.
00:09:11
Speaker
Now it's doubled up with another extension of the Live Awareness platform. And we we expect it to further grow into other use cases. So yeah, um we we are truly excited about what's happening in North America.
00:09:24
Speaker
we we We expect to see some momentum, similar type of momentum in US as well. um you know it just We entered US ah you know just before COVID.
00:09:34
Speaker
um So it's it's going through its its cycle of establishment and growth. And you know in a year or so, we we should start seeing more things coming out of US just like what's happening in Canada.
00:09:47
Speaker
Thank you, Subhash. Turning to you now, Christian, can you really summarize the the financial progress that the business has made over the past year or so? ah In particular, you've just registered you second consecutive quarter of positive cash flows. Yeah, if you could just talk through the key dynamics there, that'd be great.
00:10:06
Speaker
Yeah, absolutely. So Sebash mentioned, we've really been on a cost cutting journey, but it's it's been helped by the life cycle of the product, really. The product reached a stage of maturity where the investment required to keep it going and and continue to develop that has become much less.
00:10:29
Speaker
And so when we started looking at our business and we went from the top to the bottom, we looked at everything. We restructured our exec team. We looked at our shared service center in India and dramatically reduced the size of that.
00:10:43
Speaker
ah we We closed our Perth office. So reducing floor space around the world, ah corporate overheads and corporate costs significantly reduced. So we we went to... ah or an extended effort to reduce all unnecessary costs and really right-size the business so that it's it's um fit for performance and fit for growth.
00:11:09
Speaker
um The maturity of the business allowed us to do that and so now we've switched the focus to growth and In that process of reducing those costs, we made sure we didn't impact revenue. So we we didn't touch the sales organization because they they need to grow.
00:11:30
Speaker
um And they've been successful in doing that. And then I guess the the third part of our business is really the delivery. our And so being able to standardize and productionize our delivery processes has meant that more efficiency in that space also.
00:11:47
Speaker
So it's it's really been around a wider business transformation. And as all those pieces have come together, we've also had the opportunity to improve our balance sheet.
00:11:58
Speaker
So we've got debt down to, we just announced roughly half a million dollars of net debt. ah And as our positive cash flows come in, we're confident we can reduce that further.
00:12:09
Speaker
So your focus now is like g generating sustainable operation geared revenue growth and profits growth. Can you discuss on how how the business is going to achieve that?
Product Scalability and Partner Network
00:12:20
Speaker
Yeah, I mean, a big thing for us is the scalability of our product. So all of our products sit on the one platform and are effectively infinitely scalable.
00:12:33
Speaker
And so what we've seen with our customers is we do have this land and expand type scenario where ah they They see the value in our products once once we're with a customer and they continue to expand use. So the best recent use case of that was the NHVR. yeah ah They started small, monitoring heavy vehicles, and then towards the end of last year placed a very large order.
00:13:00
Speaker
And then in the first quarter of this year placed another order. So so we've continually seen that ah that growth. And so and as a result, they're now one of our largest customers. And we've seen similar things in Vancouver, in Brisbane, recently Sunshine Coast. So it happens all over. So that that scalability of our product allows us to grow.
00:13:25
Speaker
um Then the other side of it is the world's a big place. How do we cover that? We've been very successful with um some of our partners. So G-Techner in Canada and Duncan Solutions in Australia, they've been great in driving sales growth for us. And and we're looking to expand that partner network.
00:13:47
Speaker
So we've got a partnership agreement with Blue Systems in the US and we're we're looking at ah and a number of other partners to expand that sales network um because we have the scalable product. We've got a product people like. We just need now to find the way to the end customer. So we're we're somewhat constrained in our own sales force, but through partners, we can we can scale the effectiveness of that process.
00:14:16
Speaker
ah One point I wanted to add on top of what Christian has been highlighting is there is a strong recurrent revenue that comes from all the customers that we have added.
00:14:27
Speaker
It's not like one off deal and they go away. it's a It's a recurrent revenue, whether it's a software license fee or and so you know in different forms. um you know based on number of units or number of tickets issued or things like that, which um which allow us to keep the momentum going.
00:14:45
Speaker
So we're almost at a point where our annual economy revenue is pretty much covering the cost base of the company. So that also gives us a confidence to grow the company um with the additional revenues we have been locking in with these big customers, that the big tender wins that we have been having.
00:15:04
Speaker
And then perhaps finally, as you expand your revenues and your margins, what do you expect the priorities to be in terms of capital allocation? I see you, we've paid your debt down a little bit more, but what should we expect beyond that?
00:15:19
Speaker
Yeah, absolutely.
R&D and Strategic Sales Priorities
00:15:20
Speaker
So we're always going to, we have and always will have an R&D program um in an industry like ours. um Things move quickly. So we need to stay ahead of the game. So we'll continue to invest in in developing the product and products on the platform. um that That remains unchanged, but there'll be smart investments. um And then the the other key area for us, as I mentioned earlier, is sales growth.
00:15:46
Speaker
so So we're looking to make strategic investments in sales in order in order to achieve the growth that that we're we're looking to achieve. So um we're we're investing in people in key locations and then we'll work with partners through, I guess, their channels to to expand the reach of our product.
00:16:09
Speaker
First you, Subhash. Thank you very much and looking forward to authority in progress over the next quarter or so. Thanks, Dan. Thank you. we more time